Peabody Energy Corporation (NYSE:BTU) executives are set to take temporary pay cuts so as to support the cost reduction measures. The company is the largest coal firm by output in the United States. However, it recorded losses of over $1.1 billion over the last two years, primarily because of price swings.
The details
Peabody Energy, which operates mines in Australia and the U.S. states, disclosed that Mr. Boyce’s base salary will be cut to $1.1 million annually from $1.23 million annually from May 1 until June 30. Also, it will be reduced to $810,000 annually from $900,000 annually from July 1 until Dec. 31.
Further, the base salary of Mr. Kellow will be cut to $855,000 annually from $950,000 annually from May 1, 2015 until the end of the year. He was named CEO-elect last January and will take the new role on May 4, 2015. Mr. Boyce will serve as executive chairman of Peabody’s board after Mr. Kellow joins as CEO. The original salaries will be effective on the first of 2016.
The efforts
Peabody has been constantly trying to turn itself by minimizing production levels of metallurgical coal and reducing contractors in Australia, as other major initiatives. Shares have dropped more than 70% in the past twelve months.
The company recent leadership changes wraps up numerous years of succession planning. Mr. Kellow, who is currently Chief Operations Officer, will take the top executive role on May 4. He is a veteran of BHP Billiton Limited (ADR)(NYSE:BHP) and has worked in nations such as Colombia and South Africa throughout his career.
The problems
Peabody has struggled in past few quarters as decline in natural-gas prices continue to put pressure on coal demand as well as pricing. In October, the company said that an oversupply and weakened demand for imports in China were weighing on its performance.
